Investment banks are giving their analysts a lesson in remuneration reality. While last year’s base salary hikes mean total compensation has stayed steady or risen for many senior staff, analysts have not fared so well.
A typical level-two analyst’s base/bonus split was about $100k/$110k in 2009. But for 2010 it was $115k/80k, an overall fall of $15k, says Michael Notley, director, Taurus Financial Recruitment.
Associates, by contrast have matched or exceeded their 2009 numbers largely because their base salaries rose by about 25 to 30 per cent last year, roughly double the analyst rate.
“Some juniors will be disappointed. They worked hard last year but now have a lower bonus,” says Notley.
And in a further blow, deferred bonuses – which previously kicked in mainly at VP-level and above – are increasingly affecting analysts, especially those at EU and US banks that are applying home-country remuneration regulations to Australian employees.
“Credit Suisse, to give one example, has bought down the threshold at which bonuses are deferred to about US$51k and that has of course impacted juniors,” says a recruiter who asked not to be named.
Deferrals are easier to accept for VPs, who are more likely to be financially secure. “They have already made a lot of money. But if you’re an analyst or associate, you are still building up your own financial status so you want cash up front,” says Notley.
Nowhere to run to
Disgruntled juniors thinking of moving on the back of bad bonuses may find that it’s not worth the effort.
Total compensation at analyst level is fairly similar at major investment banks in Australia. “Goldmans, Citi, Credit Suisse – they pay more or less the same total amount,” says the anonymous recruiter.